The reckoning of Centaurus billionaire John Arnold

Read more:

The Enron trader turned hedge fund billionaire lost money last year. Can his effort to turn Centaurus into a mini-Enron revive his fortunes?

By Leah McGrath Goodman

Illustration by Andrew Clark

It is one minute
before the market’s close in the final days of
John Arnold’s first down year. The door is open to
Arnold’s corner suite in the Houston office of
Centaurus Advisors, and the nation’s youngest
hedge fund billionaire is brooding. Hunched over a desk
scattered with papers, he sits motionless, hair tousled, shirt
rumpled, no tie. The celebrated energy trader has a lot on his
mind: a coal company that’s turned into a money
pit, his firm’s third trading violation in two
years, the $725 million sale of a Texas gas hub—and a
futile last-ditch attempt to plug a hole in his $5 billion
portfolio.

Since Arnold launched Centaurus out of the ashes of Enron in
2002, he has boasted an unheard-of compound annual growth rate
of about 125%, prompting many of his...